Colorado Claimed Some Unallowable Medicaid Payments for Targeted Case Management Services

The Colorado Department of Health Care Policy and Financing (State agency) claimed Federal Medicaid reimbursement for some Targeted Case Management (TCM) services that did not comply with Federal and State requirements for fiscal years (FYs) 2014 and 2015. Of the 150 randomly sampled TCM claims we reviewed, 49 claims were unallowable because they had at least 1 of the following errors (some claims had more than 1 error): (1) the TCM providers could not provide documentation supporting that the case managers had the qualifications-that is, the education or experience-required by the Colorado TCM State plan amendment (43 claims); (2) the TCM providers could not provide documentation to support that they had actually provided 1 or more TCM services to the Medicaid recipients (10 claims); (3) the TCM providers' case notes lacked sufficient detail to support that claimed services were allowable (5 claims); and (4) the TCM providers were unable to provide complete documentation of recipients' eligibility for TCM services (3 claims).

On the basis of our sample results, we estimated that the State agency improperly claimed almost $2.2 million (Federal share) in unallowable Medicaid reimbursement for TCM services during FYs 2014 and 2015.

The State agency incorrectly paid TCM providers and claimed unallowable Federal Medicaid reimbursement because its policies and procedures did not ensure that those providers complied with Federal and State requirements for documenting case managers' qualifications, for documenting and claiming TCM services, and for maintaining documentation related to recipient eligibility determinations.

We recommended that the State agency refund approximately $2.2 million to the Federal Government for unallowable TCM claims. We also recommended that the State agency strengthen its policies and procedures to ensure that (1) TCM providers maintain documentation to document that case managers are qualified to perform TCM services, (2) TCM providers maintain documentation to support the TCM services provided, (3) it does not pay TCM providers or claim Federal reimbursement for services that are not TCM services, and (4) TCM providers maintain documentation for eligibility determinations for recipients of TCM services.

The State agency agreed that the TCM providers did not keep appropriate documentation. The State agency also provided additional comments concerning each recommendation, to include descriptions of corrective actions that it had taken or planned to take, as well as additional documentation for some of the sampled TCM claims identified as errors in our draft report. Colorado did not concur with our recommendations that providers maintain documentation of case managers' qualifications and of eligibility determinations. Based on the additional documentation that the State agency provided after the issuance of the draft report, we revised the number of errors we identified. Accordingly, we revised our statistical estimate and the dollar amount conveyed in our first recommendation. We maintain that our findings and recommendations, as revised, are valid.